Rescue act for phone maker

Turnaround specialist John Chen believes he can steer troubled phone maker BlackBerry out of the red.

"I want to build on BlackBerry's strengths in mobile data security and mobile device management," he said in a visit to the Singapore office last week.

"It is also about profit margins versus revenue. I want revenue which implies that we need a good handle on design and pricing to distribution channel and logistics," said chief executive officer Chen, who joined the company about 11 months ago.

He has also bolstered BlackBerry's strengths in mobile security and management by acquiring two companies this year. They are: Secusmart, a voice and data encryption firm, and Movirtu, an English-based mobile technology start-up with software that allows users to have multiple phone numbers on the same device and to have separate billings.

Movirtu technology has already been included in a new BlackBerry phone unveiled last week. Called the Passport, it is a square-screen phone with a physical keyboard. News reports said that industry analysts were excited by the phone's Blend system, which allows a user to get message notifications, respond to work and personal e-mail, text and other messages, while also accessing files, calendars and contacts.

Mr Chen spent 13 years with struggling software company Sybase. When he joined it in 1998, it was worth just US$362 million but after 13 years under his leadership, it was acquired by German software giant SAP for US$5.8 billion (S$7.4 billion).

BlackBerry, once a high-flying tech company, failed to adapt to the smartphone revolution and lost millions of users. In the second quarter ending Aug 30 last year, it lost nearly US$1 billion, wrote off a large inventory of unsold phones and slashed about 4,500 jobs. The numbers this year are less bleak. In the quarter ending Aug 30, it reported a loss of US$207 million, but handset sales picked up, shipping 2.4 million phones.

It also has ambitious plans to be a big player in the connected devices market, the so-called Internet Of Things.

The company's QNX software is already used by 250 car models to power mapping, entertainment and communication technology in cars.

"We're No. 1 in connected cars, providing the infotainment systems."

The company is also working with other companies in industries such as robotics and health care where its QNX software can be used.

As he nears his first anniversary with BlackBerry, Mr Chen believes the worst is over and he expects the company to be "making money in the next six quarters".

Research analyst Clement Teo said the company's move towards software will help it to succeed.

"John Chen's experience in software will help to steer them. The immediate challenges are to stem its declining hardware revenues and grow its software services, especially around security," said Mr Teo, who is with research firm Forrester.

"The danger is that its devices risk becoming irrelevant to enterprise users today, as there are alternatives easily available in the market," he added.

This article was first published on Oct 2, 2014.
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